May 12, 1992 PRESIDENT BUSH ON LEGAL REFORM +quot;America has become the most litigious so
May 12, 1992
PRESIDENT BUSH ON LEGAL REFORM
"America has become the most litigious society on Earth.
Frivolous lawsuits are exhausting our ability to compete. If
we were as good at rewarding success as we are at suing each
other, we would be a century ahead of the rest of the world."
President George Bush
January 30, 1992
Summary: Reducing Abuse and Promoting Competitiveness
o President Bush understands that promoting American
competitiveness means eliminating barriers to new jobs, to new
products for consumers, and to new applications of existing
technology. Unfortunately, the country's obsession with the
lawsuit is denying consumers new products, manufacturers new
sources of income, and workers new sources of jobs. As Vice
President Quayle told the American Bar Association last
August, "Overuse and abuse of the civil justice system has
become a self-inflicted competitive disadvantage."
o President Bush's legal reforms will meet government's
responsibility to provide a swift, fair, and effective civil
justice system. Spearheaded by Vice President Quayle, the
Bush Administration is working aggressively to reform the
legal system: changing the way government lawyers handle
cases, advising states on how to reform anti-competitive
procedural laws, proposing cost-saving changes to the rules
governing federal lawsuits, and offering a broad array of
legal reforms which now await action by Congress.
o The President has already signed an Executive Order
implementing many of the Administration's reforms for lawyers
in the federal government. However, the success of legal
reform will require more than executive action. The President
has asked Congress to approve the Access to Justice Act, which
would enact his major reforms, as soon as possible. And the
Administration has been championing important changes to the
federal procedural rules before committees that will
eventually report to the Supreme Court.
o Comprehensive reform will also require cooperation by those in
the legal profession who, until now, have all too often denied
responsibility for the erosion of public confidence in our
legal system. America's lawyers, more than most, have an
important role to play in reforming the civil justice system
to ensure its fairness and efficiency.
o The net result of the President's legal reforms would be
reduced costs for products and services, and fewer delays in
resolving lawsuits. Many Americans in rural and urban areas,
for example, would enjoy better access to health care, now
denied because doctors fearing lawsuits have been unwilling to
The Problem: An Overburdened Civil Justice System
o Many aspects of the present legal system encourage excessive
and meritless litigation. The costs created by overburdened
courts are borne by individuals, small businesses, and other
employers in the form of excessive legal fees and high court
-- The ABA estimates we will have one million lawyers by the
year 2000, a 34% increase in one decade. In terms of
international comparisons, the United States has 281
lawyers per 100,000 citizens, whereas Japan has just 11
lawyers per 100,000 citizens.
-- As the number of lawyers has grown, so has the number of
cases clogging our courts. In 1989, 18 million new civil
cases were filed in state and federal courts, amounting
to almost one lawsuit for every ten adults. Since 1955,
the number of lawsuits filed in federal courts each year
has tripled, from 59,375 to 217,874 in 1990.
-- It now takes over a year to resolve 40% of the lawsuits
filed, and delays of 3 to 5 years are not uncommon.
o Higher legal costs mean Americans pay higher prices for
everything from basic consumer goods to medical treatment.
-- Consumers and workers end up footing the bill for the
excesses and inefficiencies of our legal system. One
study calculates that the direct costs of tort litigation
alone total $117 billion a year. Indeed, one in seven
companies indicates that it has laid off employees
because of liability concerns.
The President's Agenda for Civil Justice Reform in America
o President Bush is responding directly to the litigation
explosion. He is challenging defenders of the status quo to
step aside for the sake of competitiveness. He is challenging
us to reform our legal system for the sake of American
citizens denied access to real civil justice.
o The President has endorsed fifty proposals devised by the
Council on Competitiveness which, once enacted, will reduce
litigation costs, promote swifter justice, and restore
integrity to the civil justice system. None of the
President's reforms will impair any substantive legal rights.
They will simply ensure that deserving victims receive just
compensation more quickly and at less expense.
o President Bush's proposals will reduce abuse of the system,
and will promote choice for parties in deciding how to resolve
a dispute. Details of the President's proposals include:
-- Multi-Door Courthouse -- The President's proposals would
establish alternative dispute resolution (ADR) programs
in designated federal courts. These programs will help
litigants choose less costly and less complicated ways to
resolve their disputes. The President is also calling
for increased use of judicial sanctions to stop frivolous
-- Discovery Reform -- Approximately 80% of the time and
cost of a lawsuit involves discovery, the pre-trial
investigation of the case's facts. The President's
proposals would require automatic disclosure of basic
information and mandate discovery planning conferences in
federal suits. Additional discovery would be governed by
incentives to prevent discovery being used as a weapon of
-- Fairness Rule -- The United States is one of the few
countries that does not allow the winning party to
recover the costs of litigation from the losing party.
The President's proposals would reduce frivolous suits by
allowing the winner to recover costs from the loser in
certain types of cases. The loser would have to pay
costs equal to his own costs in the suit, but would not
have to pay costs if the court determines that the
payment would be "unjust."
-- Expert Witness Reform -- Unlike ordinary witnesses who
may offer only factual testimony, expert witnesses
provide special opinions which may hold added weight with
juries. Many expert witnesses have become "hired guns,"
traveling from court to court to give testimony. The
President's proposals will require federal courts to
verify the legitimacy of expert witnesses, and to
ascertain that their testimony is based on "widely
accepted" theories instead of "junk science." The
President's proposals also will ban the practice of
paying fees to experts only if a successful verdict is
obtained. These arrangements can tempt experts to give
-- Punitive Damages -- The current system allows unlimited
punitive damages, which often generate random and
indiscriminate awards unrelated to actual harm. The
President's proposals would restore fairness and promote
predictability by placing appropriate limits on punitive
damages, dividing trials into separate phases for
determining liability and damages, and requiring clear
proof of malicious wrongdoing. Eliminating unpredict-
ability will also reduce insurance premiums for product
liability and medical malpractice coverage.
o The President has also integrated civil justice reforms into
other legislative proposals, including health care reform.
The practice of defensive medicine, which inflates health care
costs, has been widely attributed to doctors' fears of facing
meritless medical malpractice suits. Abusive malpractice
suits also have reduced the availability of quality health
care in rural and inner-city areas. Ending exaggerated claims
and reducing premiums will mean the return of physicians and
vital preventive care to under-served communities.
Executive Action, Congressional Delay
o Despite the urgency of legal reform, Congress continues to
stall action on the President's proposals:
-- Medical Malpractice Reform. The President's medical
malpractice reform bill has languished in Congress for
almost an entire year. If enacted, this legislation
would lower premium costs in rural areas and inner-cities
by removing incentives to file huge damage claims.
-- Comprehensive Legal Reform Legislation. President Bush
transmitted the "Access to Justice Act of 1992" on
February 4, 1992, which incorporates in legislation those
reforms that require congressional action. To date
Congress has not acted on the proposal.
o Congress has also failed to pass Administration-backed product
liability legislation, which would reform the product
liability system by reducing the risk of excessive awards,
providing for prompt payment of legitimate claims, and
encouraging settlement of disputes without costly, protracted
o Undaunted by congressional inaction, President Bush has used
his executive authority to further the objectives of legal
reform in areas that do not require legislation:
-- Executive Action - President Bush signed Executive Order
12778 on October 23, 1991 implementing many of the
Administration's reforms for lawyers in the federal
government, thereby making the government's litigators a
model for the private sector.
-- Federal Rules of Civil Procedure and Evidence - President
Bush has asked the Supreme Court, through its rule-making
committees to amend many of the Federal Rules of Civil
Procedure and Evidence to incorporate proposed evidence
and discovery reforms.
-- Model State Legislation - Most of the reforms President
Bush has proposed for the federal system are just as
needed in the states. To facilitate state reform, the
Administration has published Civil Justice Reform Model
State Amendments and the Model Punitive Damages Act to
serve as blueprints for state reforms, and the Justice
Department and Council on Competitiveness are working
with states to enact these and other related reforms.
Since most civil litigation occurs at the state level,
reforms implemented through state legislatures will have
a dramatic impact.
E-Mail Fredric L. Rice / The Skeptic Tank